Assume that it is now January 1, 2001 and you will need $1,000 on January 1, 2005. Your bank compounds interest rate at an 8 per cent annual rate.

I. How much must you deposit of January 1, 2002, have a balance of $1,000 on January 1, 2005?

II. If you want to make equal payments on each January 1 from 2002 through 2005 to accumulate the $1,000, how large must each of the 4 payments be?

III. If your father were to offer either to make the payments calculated in (b) or to give you a lump sum of $750 on January 1, 2002, which would you choose?

IV. If you have only $750 on January 1, 2002, what interest rate, compounded annually would you have to earn to have the necessary $1,000 on January 1, 2005?

V. To help you reach you $1,000 goal, your father offers to give you $400 on January 1, 2002. You will get a part-time job and make 6 additional payments of equal amounts each 6 months thereafter. If all of this money is deposited in a bank which pays 8 per cent, compounded semiannually, how large must each of the 6 payments be?

VI. What is the effective annual rate being paid by the bank in part v.?

When selecting a sample, there are several methods of selection available.

A company with hundreds of employees has hired a third party human resources agency. The agency is to study the employees and their level of job satisfaction, and to discover if the company needs to change anything about its management of human resources.

As part of this study, the agency wants to survey a selection of employees from within the company. Four members of the agency propose four different sampling plans for the survey.

Alvin: 'The marketing department of the company is reflective of the rest of the company in terms of job satisfaction. We should simply survey that department.'

Bonnie: 'We have access to the names of every employee in the company. We should survey 50 people from the company by putting every name in a list and choosing 50 names completely at random.'

Crystal: 'The company is made up of 60% men and 40% women. I believe that men and women will have different levels of job satisfaction, and we should force our sample to have 60% men and 40% women.'

Donald: 'As Bonnie says, we should put every name in a list. However, we should only pick one person at random, from the first ten people on the list, and then pick every tenth person thereafter.'

a)The member that is proposing a cluster sample is:

1) Alvin
2) Bonnie
3) Crystal
4) Donald

b)From the list below, select the correct statement about sampling selection methods:

1) Systematic sampling guarantees that every sample of a given size stands an equal chance of being selected.
2) Stratified sampling guarantees that every sample of a given size stands an equal chance of being selected.
3) Cluster sampling guarantees that every sample of a given size stands an equal chance of being selected.
4) None of the above statements are correct.

A bank has been losing customers over the past year. Whenever a customer closes their account with the bank, they are always asked why (so the bank has some idea of the services that it needs to improve). However, it would like to gather more information on what its current customers think, to see if there are any other areas that it needs to work on.

The bank has 100,000 customers. Every customer name is put into an ordered list, effectively giving each customer a number from 1 to 100,000. The bank then generates 500 unique random numbers between 1 and 100,000 and selects the customers that correspond to these numbers. The bank surveys these 500 customers.

This is an example of:

KRJ Corporation reported (in $ millions) tax expense of $950 for the year. Taxes payable at the beginning of the year was $150 and at the end of the year it was $153. Deferred taxes at the beginning of the year was $114 and at the end of the year it was $123. The company also reported deferred tax assets at the beginning of the year of $87 and at the end of the year it was $74. How much cash (in $ millions) was paid for taxes for during the year?

Charlotte's Crochet Shoppe has 14,000 shares of common stock outstanding at a price per share of $74 and a rate of return of 11.57 percent. The company also has 270 bonds outstanding, with a par value of $2,000 per bond. The pretax cost of debt is 6.11 percent and the bonds sell for 96.9 percent of par. What is the firm's WACC if the tax rate is 39 percent?

Inventory TableClose

The following data pertain to Company A’s inventory that was purchased on January 5, Year 1, for $40,000:

Note: Entire inventory was sold on May 1, Year 2.

EmailClose

Hey Bill,

As you have probably already seen, there is a great newspaper article detailing the company’s plans to go global. You will notice that the biggest challenge that we face is learning the new accounting standards (IFRS). To get us started, I will need your help in calculating some of the Year 1 quarterly inventory balances under both U.S. GAAP policy and IFRS policy. I know that this is a bit of a challenge, but I have ultimate faith in you. Let me know if I can do anything to help.

Sincerely,

Rufus

P.S. Remember that Company A accounts for its inventory using the LIFO method under U.S. GAAP and the FIFO method under IFRS.

Newspaper Article Announcing Global ExpansionClose

Company Seeks to Go Global

Company A is a publicly traded company that reports interim financial statements on a quarterly basis. Until recently, that is all that Company A has ever been. Now, Company A seeks to maintain their old traditions while simultaneously traversing the unknown seas into foreign lands, in the hopes of increasing their global market share.

“We really believe that going global will not only benefit our current employees and their families, but also the lives of potential future employees and their families,” the CEO stated when asked about the decision to go global. “I am really looking forward to leading the way in the greatest project that this company has ever undertaken,” the CEO continued, beaming with pride.

When asked about the challenges that lie ahead, the CEO responded, “Our biggest challenge so far has been learning the new accounting rules and regulations that are applied overseas. For the most part they are similar to the regulations that we abide by here in the States, but there are some instances in which the two standards are wildly different.” However, despite whatever adversity might lie ahead, Company A has an attitude that cannot and will not be defeated.

Scroll down to complete all parts of this task.

Use the information provided in the exhibits to calculate the inventory amounts as they should be reported in the financial statements prepared under U.S. GAAP and IFRS. Enter the appropriate amounts in the associated cells. Enter all amounts as positive values. Round all amounts to the nearest whole number.

ADS Fashions is a specialty clothing store. Its credit managers are trying to decide which credit policy to choose from the following 3 proposals.

The company has an annual opportunity cost and cost of capital of 10%. Assume Variable Costs occur at time 0, and that Sales less Bad Debt Costs less Credit Administration & Collection expenses all occur on the latest payment date that customers pay for credit sales. The Variable Cost Ratio (VCR) is 40% for each of the proposals.

Find the PV of revenues less PV Costs for each of the following policies to see which one gives the highest present value (PV), and explain which Policy would be best, i.e. give the highest Daily PV of Revenues – PV Costs.

(Policy 1) Under its existing credit policy, the company has Annual Credit Sales of $10,000,000. Bad debts as a percentage of total sales of 2%. Credit administration and Collection expenses as a percentage of total sales of 3%. Customers take on average 30 days to pay.

(Policy 2) Under a proposed new, more relaxed credit policy 2, the firm’s Annual Credit Sales are expected to rise to $12,000,000. Bad debts as a percentage of total sales are expected to rise to 2.5% of sales. Credit administration and Collection expenses as a percentage of total sales are expected to go up to 3.5%, and Customers are expected to take 40 days to pay.

(Policy 3) Under a proposed new credit policy 3, the firm would offer a Discount of 2%, with terms of 2/10, net 40, and 50% of customers would be expected to take the 2% discount and pay on day 10, and 50% of customers would be expected to not take the discount and pay on day 40. Credit Sales annually are expected to go up to $12,500,000. Bad debts are be expected to fall to 2%, and Credit administration and Collection expenses as a percentage of sales are expected to fall to 1.5%.

A study investigated the relationship between audit delay (Delay), the length of time from a company’s fiscal year‐end to the date of the auditor’s report, and variables that describe the client and the auditor. Some of the independent variables that were included in this study follow: (12 marks total) Industry A dummy variable coded 1 if the firm was an industrial company or if the firm was a bank, savings and loan, or insurance company Public A dummy variable coded 1 if the company was traded on an organized exchange or over the counter; otherwise coded 0 Quality A measure of overall quality of internal controls, as judged by the auditor, on a five‐point scale ranging from “virtually none” (1) to “excellent” (5) Finished A measure ranging from 1 to 4, as judged by the auditor, where 1 indicates “all work performed subsequent to year‐end” and 4 indicates “most work performed prior to year‐end.” A sample of 40 companies provided the data that is available on the course portal.

a. Develop the estimated regression equation using all of the independent variables.

b. Did the estimated regression equation developed in part (a) provide a good fit? Explain.

c. Develop a scatter diagram showing Delay as a function of Finished. What does this scatter diagram indicate about the relationship between Delay and Finished?

d. On the basis of your observations about the relationship between Delay and Finished, develop an alternative estimated regression equation to the one developed in (a) to explain as much of the variability in Delay as possible.

Please answer all the parts of the question. Please type the answer in understandable font and size.

A statistical program is recommended.

A study investigated the relationship between audit delay (Delay), the length of time from a company's fiscal year-end to the date of the auditor's report, and variables that describe the client and the auditor. Some of the independent variables that were included in this study follow.

A sample of 40 companies provided the following data.

(a)  Develop the estimated regression equation using all of the independent variables. Use x₁ for Industry, x₂ for Public, x₃ for Quality, and x₄ for Finished. (Round your numerical values to two decimal places.)

ŷ =

(c)  Develop a scatter diagram showing Delay as a function of Finished.

On the basis of your observations about the relationship between Delay and Finished, use best-subsets regression to develop an alternative estimated regression equation to the one developed in (a) to explain as much of the variability in Delay as possible. Use x₁ for Industry, x₂ for Public, x₃ for Quality, and x₄ for Finished. (Round your numerical values to two decimal places.)

ŷ =

A statistical program is recommended.

A study investigated the relationship between audit delay (Delay), the length of time from a company's fiscal year-end to the date of the auditor's report, and variables that describe the client and the auditor. Some of the independent variables that were included in this study follow.

A sample of 40 companies provided the following data.

a) Develop the estimated regression equation using all of the independent variables. Use x₁ for Industry, x₂ for Public, x₃ for Quality, and x₄ for Finished. (Round your numerical values to two decimal places.)

ŷ =  80.43+11.94x1​−4.82x2​−2.62x3​−4.07x4​

D) On the basis of your observations about the relationship between Delay and Finished, use best-subsets regression to develop an alternative estimated regression equation to the one developed in (a) to explain as much of the variability in Delay as possible. Use x₁ for Industry, x₂ for Public, x₃ for Quality, and x₄ for Finished. (Round your numerical values to two decimal places.)

ŷ =  

Scammers Inc. has developed a new Immune Booster drink (IB) as well as a “cure” for Covid-19 based on Colloidal Silver (CS). As the product manager for the firm, you are responsible for setting the pricing policy for the new products. You are considering a bundled package that includes both products, and you assume the marginal cost of production is zero for planning purposes. You have identified four basic types of customers who may buy these new products, and their reservation prices for the two new products are provided in the following table:

1. Suppose you sell the two products separately, and each buyer is expected to purchase one unit of the product per week. Which prices for IB and CS maximize weekly revenue? What is the weekly revenue equal to?

2. If you offer the two products under a pure bundling strategy, what is the revenue maximizing bundle price? What is the weekly sales revenue from the pure bundling scheme?

3. What are your firm’s profits if you charge $19 for a bundle containing one unit of IB and one unit of CS but also sell the products separately at a price of $14 for IB and $18 for CS?